Financial Review

Investment policy and objectives

The Trust Deed gives the Trustees unrestricted powers to determine investment policy. The Trustees appoint investment managers and have agreed arrangements for reviewing and assessing their performance and portfolio selection. All investment decisions are delegated to the appointed investment managers but must comply with Nugent Care’s ethical considerations. Nugent Care’s ethical investment policy states that no investments are knowingly to be made in any company which generates more than 10% of turnover from military activity or 10% from the production or distribution of pornography and/or adult entertainment or more than 10% from the production of anything which threatens the sanctity of life. The investment objective of the Trustees is to limit the risks to which the charity is exposed through its stockholdings, whilst maintaining the portfolio’s capital valuation in real terms, and to provide an income stream to support charitable objectives. The instructions to the investment managers reflect this objective. The listed investment portfolio decreased in value by £5,913,000 to £4,286,000 (2019: £10,199,000). This included the disposal of part of the portfolio during the year amounting to £5,165,000. The portfolio produced an income stream of £247,000 to support our charitable activities. The fair value of investment property at the year-end amounted to £143,000 (2019: £310,000) and relates to a legacy property with a value based on an informal valuation following a review of similar properties. Investment property in the form of land was disposed of during the year at a value of £170,000.

Reserves policy

Nugent is a charitable trust with activities dependent on donations, legacies and other charitable gifts. It also functions as a service provider, managing fees and grants from statutory bodies for specific activities, projects and services. Reserves are held to enable Nugent to meet its legal and moral commitments to the people it serves and its obligations as a good employer. The specific purposes of the reserves held are to enable the Trustees to:

• Cover the financial risks involved in providing the level of services and activities already approved; • Provide for the development of existing and new services appropriate for the charity.

• Meet the shortfall between expected levels of fundraising and the economic cost of activities wholly or partially dependent on voluntary funds.

The Trustees consider and review the appropriate requirements for free reserves (being those unrestricted funds not expended on fixed assets, designated for specific purposes or otherwise committed). After deducting designated funds, uncommitted reserves freely available for current activities increased by £1,313,000 this year to produce an accumulated surplus of £757,000. The Trustees have assessed the attendant risks and are satisfied that, given that the charity’s operations are substantially funded from statutory sources, the level of resources is sufficient to meet them.

Income

Total

2018/19 2019/20 £19,743,000 £17,466,000

Schools

2018/19 2019/20 £2,861,000 £2,557,000

Donations

2018/19 2019/20 £214,000 £187,000 Residential Homes and Individual Day Services

2018/19 2019/20 £14,223,000 £13,115,000

Legacies

2018/19 2019/20 £13,000 £500

We also had grant income of £429,000.

Expenditure

Total

2018/19 2019/20 £20,915,000 £21,002,000

Schools

2018/19 2019/20 £3,355,000 £3,188,000

Childrens, Adults and Community Services

2018/19 2019/20 £1,160,000 £1,145,000 Residential Homes and Individual Day Services

2018/19 2019/20 £16,047,000 £16,324,000

Expenditure includes an accrual for holiday pay not previously recognised. At 31 March 2020 this totals £296,000.

Surplus/Deficit

The Statement of Financial Activities shows Net Expenditure of £4,281,000 after taking into account gains on investments of 745,000. This is compared to Net Expenditure of £481,000 in 2019. Nugent’s Strategic Plan is ambitious and rigorous in order to turn around the financial performance of the charity. Nugent continues to operate within a difficult environment as a result of the financial constraints placed on Local Authorities with regard to the funding of adults’ and children’s homes. Fee increases are difficult to obtain from Local Authorities.

The Trustees regularly review operations to ensure that there is no jeopardy to the charity’s objectives and that the level of approved deficit funding of some services provided is consistent with the longer term objective stated in the reserves policy.

Significant Events Existing Services - Major Capital Works

Marydale Lodge The refurbishment works to the bedrooms at Marydale lodge are now complete at a cost of £880,659. This represents an overspend in the grant funding made available of £44,531 (5.3%). This was due to enhancement to the IT infrastructure, changes to the work schedule (two rooms at a time as opposed to six) and variations to the specification during the works such as Corian doors rather than timber. All invoices are now discharged and grant received. Applications for six additional grants were lodged following invitation from DfE. These totalled £113,111 and were granted in respect of: • CCTV improvements • Keytracker security system • WC locks on corridors • Dining Room furniture • InVentry visitor system • Replacement control panel doors Subsequently the Keytracker security system application was varied to include additional works to improve the admissions journey for young people adding a further £18,534.00 to the funding. These works are now complete save for the additional works to the admissions corridor which are waiting on the fabrication of the specialist door frames which are due in August 2020.

Lime House Following the review of the Fire Risk Assessment for Lime House additional capital works were identified in respect of fire safety. These included: • Compartmentation survey and improvement to the basement • Replacement of notional fire doors to ensure sufficient separation • Installation of additional fire doors to ensure sufficient separation • Installation of two additional fire escape routes to ensure timely evacuation Works were tendered at £283,000 and delivered in 3 phases: Fire Doors; Basement compartmentation and fire escapes. Works are complete to phases 1 and 2 with phase 3 due to complete in July 2020, subject to any final account variations works are on time and on budget. Nugent House School Nugent House School benefitted from a number of initiatives during the course of 2019/20 including: • 490 internal hours of cyclical and targeted decoration • Repairs to the defective chimney to main building • Replacement of the heating boilers • Refurbishment of the dining room • Refurbishment of Segal House and the relocation of ACE provision • Relocation of Primary provision • Repairs and works to staff car parking • Security fencing works • The formation of a multi function suite in the main building allowing increased agile working and so Senior and Executive presence on site. Total investment in the works extended to £200,000 +. Agreed virements within budget lines allowed the following projects to be initiated at zero increase to school budget.

Land Disposals The land at 38 Newarth Lane, Hesketh Bank

The land at Newarth Lane was sold in June 2019 for £170,000 following a number of abortive offers. The Residential premises were refurbished at a cost of circa £15,000 and now generate a rental income of £6,000 pa by way of rent though an Assured Shorthold Tenancy agreement. The value of the property has also been increased by some £30,000.

The land on the East side of West Lane Formby

Following the break down in negotiations between

the purchaser and LPA in respect of planning permission for the residential element of the proposed scheme both parties agreed to rescind the contract for sale to allow Nugent to progress alternative opportunities. Negotiations are ongoing with other bidders in a rapidly evolving landscape. The Formby Neighbourhood plan was adopted in late 2019 affecting land values.

Ravenmeols Lane, Formby

An offer of £275,000 on the site has been accepted and exchange is expected shortly with planning and commensurate completion allowed within the contract for 24 months.

The former Blackbrook House site in St Helens

The proposed disposal continues to be on hold whilst alternative redevelopment options as a Nugent service are considered.

Lower field, Billinge

Unsolicited offers and development plans for Nugent House School have prompted a discussion in respect of the value of the field to Nugent operations. The field has been recommended for disposal to fund the aforementioned development.

Clarence High School

Clarence High School continues to be the subject of numerous unsolicited offers of sale. These are held on file pending Trustee agreement for disposal. It has been recommeded that the site be disposed in conjunction with West Lane Field to improve values on both plots

Fundraising

Nugent is registered with the Fundraising Regulator and has an Ethical Fundraising Statement:

• We respect the rights of our Donors and supporters to clear, truthful information on the work of Nugent. We manage Donors’ information responsibly. • We comply with the Charity Commission and

UK law in every respect including openness and honesty with our donors, supporters and members of the public. • We do not employ any external fundraisers to contact members of the public to obtain donations. We never ‘cold call’ a member of the public either by telephone, door to door contact or stop people in the street to obtain donations. • We have never sold or passed on any data or donor information.

• We do not accept gifts or donations if they are from a source that is that is said to be ethically dubious, or whose behaviour is inconsistent with the aims of the charity. • All fundraising undertaken by Nugent is conducted in an ethical, honest and transparent basis. • Spending on fundraising and administration is kept as low as is cost-effective. • We put the interests of our donors at the very heart of our fundraising activity. We value our donors and supporters and connect our donors to the cause at every opportunity. • We act in the best interests of the Charity when deciding to accept or refuse a particular donation. • Our website provides clear information on how people can remove themselves from mailing lists. • Nugent is a fully paid up member of the

Fundraising Regulator and complies with the

Fundraising Regulator’s Code of Fundraising

Practice. • This promise outlines the commitment made to donors and the public by fundraising organisations which register with the

Fundraising Regulator. Those who register with the regulator agree to ensure their fundraising is legal, open, honest and respectful. Additionally; • The standards for fundraising are set out in the

Code of Fundraising Practice. • We provide information on our website linked to the Fundraising Regulator and to the Nugent

Governance department should an individual wish to complain. • Nugent has a Fundraising Promise.

Nugent’s Fundraising Promise

We will commit to high standards

• We will adhere to the Fundraising Code of

Practice. • We will monitor fundraisers, volunteers and third parties working with us to raise funds, to ensure that they comply with the Code of

Fundraising Practice and with this Promise. • We will comply with the law as it applies to charities and fundraising. • We will display the Fundraising Regulator badge on our fundraising material to show we are committed to good practice.

We will be clear, honest and open

• We will tell the truth and we will not exaggerate.

• We will do what we say we are going to do with donations we receive. • We will be clear about who we are and what we do. • We will give a clear explanation of how you can make a gift and change a regular donation. • Where we ask a third party to fundraise on our behalf, we will make this relationship and the financial arrangement transparent. • We will be able to explain our fundraising costs and show how they are in the best interests of our cause if challenged. • We will ensure our complaints process is clear and easily accessible. • We will provide clear and evidence based reasons for our decisions on complaints.

We will be respectful

• We will respect your rights and privacy. • We will not put undue pressure on you to make a gift. If you do not want to give or wish to cease giving, we will respect your decision. • We will have a procedure for dealing with people in vulnerable circumstances and it will be available on request. • Where the law requires, we will get your consent before we contact you to fundraise. • If you tell us that you don’t want us to contact you in a particular way we will not do so. We will work with the Telephone, Mail and

Fundraising Preference Services to ensure that those who choose not to receive specific types of communication don’t have to.

We will be fair and reasonable

• We will treat donors and the public fairly, showing sensitivity and adapting our approach depending on your needs. • We will take care not to use any images or words that intentionally cause distress or anxiety. • We will take care not to cause nuisance or disruption to the public.

We will be accountable and responsible

• We will manage our resources responsibly and consider the impact of our fundraising on our donors, supporters and the wider public. • If you are unhappy with anything we’ve done whilst fundraising, you can contact us to make a complaint. We will listen to feedback and respond appropriately to compliments and criticism we receive. • We will have a complaints procedure, a copy of which will be available on our website or available on request.

• Our complaints procedure will let you know how to contact the Fundraising Regulator in the event that you feel our response is unsatisfactory. • We will monitor and record the number of complaints we receive each year and share this data with the Fundraising Regulator on request.